The Monetary Authority of Singapore (MAS) announced a significant expansion in its asset tokenization initiatives, aiming to set industry-wide standards across various financial sectors, including fixed income, foreign exchange (FX), and asset & wealth management.
The announcement includes the successful completion of the first phase of the Global Layer One (GL1) initiative and outlines plans to further develop the underlying digital infrastructure for tokenized assets.
Over the last two years, MAS has collaborated with 24 major financial institutions under Project Guardian to pilot asset tokenization, involving key players such as asset managers, market operators, and commercial banks.
This week, the MAS welcomed the inclusion of three major global industry associations—the Global Financial Markets Association (GFMA), the International Capital Market Association (ICMA), and the International Swaps and Derivatives Association (ISDA)—to further these efforts.
The partnership aims to develop standardized protocols and data specifications to ensure uniformity and security across the board.
The fixed income workstream, for instance, will collaborate with ICMA to refine bond data taxonomy and integrate smart contract standards with assistance from GFMA.
Similarly, the FX workstream will work alongside ISDA and the GFXD to formulate comprehensive FX documentation and risk management frameworks.
A core component of these initiatives is the development of a shared ledger infrastructure capable of supporting global tokenized asset transactions while adhering to regulatory standards and preserving the policy autonomy of participating jurisdictions.
Prominent financial institutions including BNY, Citi, J.P. Morgan, MUFG Bank, and Societe Generale-FORGE (SG Forge) have joined hands with international policymakers to outline the business, governance, and technological aspects of this infrastructure.
A newly published whitepaper details the design principles and objectives of the GL1, setting the stage for broader collaboration with more policymakers, central banks, regulators, and financial institutions.
Plans are also in place to potentially establish a non-profit organization (GL1 Org) to develop and enforce the common principles and standards necessary for a global shared ledger system.
Leong Sing Chiong, Deputy Managing Director (Markets and Development) at MAS, emphasized the strategic importance of these initiatives. He said:
Project Guardian provides a safe platform for stakeholders to explore the benefits and risks associated with asset tokenisation. The GL1 initiative is a pivotal step towards harnessing the efficiencies of digital transformation in capital markets.
Executives from participating financial institutions also expressed their support and enthusiasm for the GL1 initiative. Caroline Butler of BNY highlighted the initiative’s potential to integrate resilience, risk management, and innovation.
Puneet Singhvi of Citi and Naveen Mallela of Onyx by J.P. Morgan underscored the transformative impact of blockchain technology in fostering interoperability and modernizing legacy systems across the financial landscape.
